UNITED NATIONS - UN Secretary-General Ban Ki-moon is alarmed that Israelis and Palestinians are engaged in a downward spiral of actions and counter actions and calls on both sides not to exacerbate existing divisions, a senior UN official said on Thursday.

Israel is withholding critical tax revenue and seeking ways to prosecute Palestinian leaders for war crimes in retaliation for Palestinian moves to join the International Criminal Court (ICC).

The ICC move paves the way for the court to take jurisdiction over alleged crimes committed in Palestinian lands and investigate the conduct of Israeli and Palestinian leaders. Neither Israel nor the United States is an ICC member.

The United States has suggested some $400 million in aid could now be in jeopardy.

U.S. Ambassador to the United Nations, Samantha Power, said the United States, an Israel ally, had been reaching out to both parties to try to reduce tensions and find a path forward.

"We continue to oppose unilateral actions by both sides that we view as detrimental to the cause of peace," Power told the Security Council, describing Palestinian moves to join the ICC and other treaties as "counter-productive."

Momentum has built since PA President Mahmoud Abbas succeeded in a bid for de facto recognition of Palestinian statehood at the UN General Assembly in 2012, making Palestinians eligible for the ICC.

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